Expert: Morgan Smith - 6/2/2011

Question
QUESTION: Hello,

I have made this private question into a public question. I'm sorry for the misunderstanding.

We bought our home in the Sacramento, CA area back in June, 2010. Back in January 2011, we recieved a letter from a 501C3 non-profit organization  - a Land Trust; they claimed that we owed them a conveyance fee on the transfer of the house from the bank (we bought it as a foreclosure) to us. Based on the documentation they sent us, they sued the developer for "infringing" on "wetlands", etc. The developer settled with them by imposing a transfer fee on every home sale in the area for the next 20 years; the fee equals 0.5% of the sale price.

This seems completely wrong. How does an unaccountable private group get away with sending us a bill and demanding payment? How can a developer stick third parties (who are NOT parties to his settlement agreement) with a bill? In case it matters, nobody disclosed the fee in any documentation that we signed at closing. We have made a claim against the title company; they are basically stalling at this point. We are thinking of setting up our own land trust to put the house in, in order to make it "lien proof" from this other Land Trust. Please give me your ideas on this situation. Thanks very much.

ANSWER: Dear Earl,

Before I respond further to your question, I must make clear that I do not represent you, and cannot give you individual particularized legal advice. No attorney client relationship is created by this email. For legal advice, you should hire your own attorney, and follow their advice. My role with AllExperts is limited to providing general information and suggestions for educational or general knowledge purposes.

Before you take any action, consult with your own attorney. Speak to an attorney licensed to practice law in your state about the strengths, weaknesses, and likely outcomes of any contemplated cause of action or defense.

Your question is about third party benefits and liability attendent to contract and/or settlement.  In many kinds of cases, for example class actions, your rights can be effected even though you are not a participating party to the suit.

It sounds to me like when you bought the property, liability was attached perhaps by an easement etc. for the transfer fee.  You're title company should have detected that problem and alerted you to it for your informed consent prior to closing, and their failure to do so sounds to me like negligence.  It seems you have already commenced a suit against them, and I think that's an excellent begining.

Alternatively, the Land Trust could be full of baloney, and you might do well to sue them too.  Perhaps the attorney helping you with your suit v. the title company could assist you in bringing an action and at least seeking a temporary injunction on the transfer fee until your title company suit is resolved.

Regretably, I cannot claim to be competent to make a suggestion about your idea of establishing a second land trust, and recommend that you confer with local counsel knowledgeable in that area.

My suggestion,


I hope this helps, good luck to you.

Morgan Smith
SMITH & RAVER LLP
Minneapolis, Minnesota
smith-and-raver-llp.biz
Conciliation Court * Civil Litigation * Forfeitures * Construction * Family Law


---------- FOLLOW-UP ----------

QUESTION: Thanks very much, Morgan.

Ideally, I would like to go after the Land Trust, preferably in a class-action suit. Another possibility would be to sue the city officials that allowed this "camel" to stick his nose in the "tent".

In order to get the best representation, please tell me what TYPE of law this falls under: Real Estate Law? Contract Law? General Civil Law?

Thanks very much,
Earl

Answer
Hi again Earl,

The same rules of my original response apply to this follow up.
I also apologize that the "My suggestion," fragment appeared in error at the end of my remarks.

An attorney experienced with real estate and contract problems and licensed in your state and federal court would be ideal.  Municipal liability and complex litigation are tricky subjects.  Unfortunately, to get that entire package, you probably need the service of one of the big firms, who will put a qualified team of lawyers on your case, and that carries with it a big fee.

I hope this helps, good luck to you.

Morgan Smith
SMITH & RAVER LLP
Minneapolis, Minnesota
smith-and-raver-llp.biz
Conciliation Court * Civil Litigation * Forfeitures * Construction * Family Law